Canada is taking the US to the World Trade Organization over what it says are illegal flaws in its trade enforcement system, ratcheting up a bitter fight with the Trump administration by targeting one of Washington’s main trade weapons.
The move to open a wide-ranging challenge against the US anti-dumping system comes just days ahead of a crucial round of talks over the Trump administration’s efforts to renegotiate the North American Free Trade Agreement with Canada and Mexico. One of the elements of Nafta that Canada is seeking to defend is a special dispute system that allows it to challenge US anti-dumping rulings.
It also comes as am increasing number of US actions are targeting what it claims are subsidised and dumped imports from Canada ranging from Bombardier jets to lumber. In the latest such case the US Commerce Department announced on Wednesday that it was imposing tariffs on imports of Canadian paper worth $1.3bn last year that it claimed benefited from illegal subsidies.
The Trump administration reacted angrily to Ottawa’s request for consultations, which was lodged at the WTO last month but released publicly on Wednesday.
“Canada’s new request for consultations at the WTO is a broad and ill-advised attack on the US trade remedies system,” Robert Lighthizer, Mr Trump’s trade tsar, said in a statement. “Canada’s claims are unfounded and could only lower US confidence that Canada is committed to mutually beneficial trade.”
Were Canada to win, Mr Lighthizer said, it would mainly benefit other countries and open the door to a flood of imports from China. “Canada’s claims threaten the ability of all countries to defend their workers against unfair trade,” he added. “Canada’s complaint is bad for Canada.”